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China is predicted to be the most favoured destination for companies looking to raise capital and float their businesses by 2025.  This is confirmed by almost 80% of respondents in PwC's Capital Markets in 2025 report.

In a poll of almost 400 executives from across the globe, 8 out of 10 also believed that by 2025, companies listing on Chinese exchanges would also raise the most capital of any international exchange through initial public offerings (IPOs).

The report confirms the current attractiveness of London and New York as the leading financial centres for access to international capital, with 72% and 74% of those surveyed saying that they would consider those markets respectively for an IPO on a foreign exchange.

However, when asked what they thought the position would be in 2025, those percentages decreased to 27% and 39% respectively, due to the potential growth of capital markets activity in China (55%) and India (38%) by that time.

"It may seem that the rise of the east is inevitable, but established exchanges around the world would disagree with the pace of this shift.  There have been major IPOs in the UK, the US, Spain and Poland this year and PwC expects this to continue in the near term.  If we are set for an IPO 'tug of war' between west and east, it can only benefit companies and investors," says Clifford Tompsett, PwC IPO Centre Leader.

The shift to the east is dependent on a number of critical factors, the key one being access.  The Shanghai exchange is currently still closed to foreign issuers despite the Chinese government's announcement back in 2008 to open the market.

Also, the way in which the legal and regulatory environment will evolve, followed by political uncertainty, are collectively seen by respondents as the factors most likely to derail the shift to the emerging market exchanges.

Currently, developed markets are significantly larger than their emerging markets rivals in terms of size, so sustained growth must take place if the east is to make a meaningful challenge.

However, as an indicator of the exponential growth in Asia so far, the combined market capitalisation of China's Shanghai and Shenzhen equities markets has risen from US$400 billion in 2005 to US$4 trillion at the end of the fourth quarter of 2010.

"Despite current volatility in the equity markets, the volume and value of listings in the China Bourse of Shanghai, Shenzhen and Hong Kong has remained strong, and should continue to gather momentum when confidence returns to the markets.  Companies realise that China offers unparalleled access to growth capital, and there are no signs this trend will slow down," says Edmond Chan, PwC Capital Market Services Group Partner.

The capital markets spotlight may be turning towards the east, but it is still imperative for companies to select the right stock exchange for their particular needs, and that is, the platform which puts them in the best position to achieve their immediate IPO objectives and beyond.

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